Amid a slowdown in the Jamaican real estate market, First Rock Real Estate Investments will be looking to the wider Caribbean region for more accretive opportunities to grow its business.

First Rock Real Estate suffered its first full year loss in 2023 when it reported a US$3.40-million net loss compared to the US$4.05-million net profit in 2022. The loss was due to a swing in the value of its financial instruments, foreign exchange losses, and a larger loss on the disposal of its investment properties. The group’s share of profit from its two new Jamaican joint ventures, St Thomas Luxury Limited and Ocean Eyes Limited, tapered the losses.

“We’ve commenced the handover of Hambani homes, and this will continue throughout the rest of this financial year. We have also commenced the realisation of cash from our sale of investment properties. We have also increased investment properties in Jamaica in 2023 from four to six in Jamaica. Notably, growth and expansion of our regional footprint through First Rock Latam for the development and completion of the KFC franchise location on 20-year agreements,” stated Ryan Reid, executive chairman and co-founder of FirstRock Group (formerly First Rock Capital Resource), in his 2023 highlights.

First Rock Real Estate has US$13.54 million in loans due during 2024, with a US$9.97 million loan from Sagicor Bank related to its Hambani Estates development being the largest balance. First Rock had US$10.32 million in investment property held for sale at the end of 2023.

First Rock’s financials mentioned that a Hambani unit was sold in January for US$1.24 million and that it sold its investment in the Torres de Heredia residential development in February. The first quarter report revealed revenue from these property sales of US$1.25 million, but a US$1.65 million cost of sale from the disposal.

The annual report mentioned that the Hambani project, which broke ground in 2021, should have been completed in Q3 2023 but has been delayed to Q3 2024 due to unavoidable supply chain and labour force issues. The Hambani Estates development consists of 12 stand-alone villas which was 60 per cent presold at the end of 2023.

“Construction of the Hambani Estates development continues to progress diligently, with the commencement of handover during the quarter just ended. In addition, the phased repayment process of the construction loan with our main banker has commenced. Practical completion on the remaining homes in the first phase is expected in short order,” stated Chairman Norman Reid in the March 2024 report.

With a US$60.20-million asset base and relatively low leverage, First Rock Real Estate will be pushing its interests to the wider Caribbean and Latin American region to garner more rental income and real estate gains. First Rock handed over the first of two KFC restaurants in Costa Rica (KFC El Roble) earlier this year and is set on executing more deals in that market. First Rock was refunded its US$125,000 deposit that it had put down for the Kailani (Hilton) project in the Cayman Islands during 2023.

“We really have some big plans for Costa Rica and the wider Caribbean region as mentioned by Ryan in his presentation. We’re currently looking on a few other opportunities with KFC in Costa Rica, and they are on an aggressive expansion journey in Costa Rica, which represents one of their most profitable territories. We also have some industrial warehouse opportunities looking at there as well, and we have some opportunities which are all income-generating in other territories in the wider Caribbean, most notably Cayman and Turks & Caicos,” said First Rock Group Vice-President Shaun Myers during the question-and-answer session.

First Rock director York Page Seaton retired as a director of the company, while Reid was appointed as a director of the company. All other resolutions were approved.

“We continue our regional diversification strategy given Jamaica’s high interest rate environment which continues to impact the Jamaican real estate sector. We’ll be looking to reallocate assets to be more heavily weighted in Costa Rica and the Cayman Islands. We intend to return to regularly paying dividends in this financial year. Our aim is for Q3 or Q4 this year,” Reid said in his presentation to shareholders.